Seven Steps to Becoming a One-Income Family

It's no myth: More couples than ever are relying on two incomes to get by.

According to the Families and Work Institute in New York, 79% of today's married couples have both people in the work force, up from 66% in 1977.

But at some point, life happens -- you start a family, go back to school or face a layoff -- and this new reality may force you and your partner to question whether you're ready to jump off of the dual-earner treadmill.

While there are steep odds to overcome, living with only one family income can be done with thorough planning and a willingness to make choices.

Get on The Same Page With Your Partner

It is critical to have a frank conversation with your spouse about why you're making the choice to live on one family income.

"Be sure to talk about all aspects of this decision, making sure this is a comfortable, mutual agreement," says Judy Lawrence, a financial counselor in Albuquerque, N.M., and author of "The Budget Kit: The Common Cents Money Management Workbook."

Feelings of ownership over money can be a thorny issue for one-income families, as the spouse earning the money may feel more entitled to spend it. Establishing a personal allowance for both partners can reduce those feelings, says Ben Gilbert, a Certified Financial Planner with Silver Oak Advisory Group in Portland, Ore.

Carefully Map Out Your Budget

Don't resign yourself to an all-ramen noodle diet without first setting a detailed budget for living on one family income.

"Once a couple can see what their obligations are, they can look at that list and determine what they give up," Lawrence says.

Beyond the mortgage and groceries, the budget should also include less obvious expenses such as life insurance and disability coverage, Gilbert says.

Set spending priorities and adjust your budget accordingly, Lawrence says. Should you give up dining out, or weekend entertainment, or both? Re-evaluate fixed expenses such as cable, cell phone payments and monthly subscriptions.

Trim Big-Ticket Items First

Forgoing a few lattes probably won't make up for the loss of an entire paycheck.

Trimming costs on housing, cars and other major monthly expenses will free up the most room in your budget. But this is the tricky part, as costs of living for necessities have risen drastically in recent decades, says Lois Backon, senior vice president of the Families and Work Institute.

Still, it's not impossible. "There are lots of surprising ways to lower housing expenses," she says.

Because selling a house in a depressed market might not be feasible, Backon suggests exploring nontraditional living arrangements, such as renting out a room.

Cars are another major expense, and it might be worth selling a vehicle if one person won't be commuting, Backon says. And clear off any credit card debt or other monthly bills that might prove cumbersome later as a one-income family, she says.

Say 'So Long' to The Joneses

With most of today's couples pulling in two paychecks, many of the trappings of today's modern family -- the bigger house, new cars, dinners out -- are the result of a two-income lifestyle.

Don't expect to have all of those things if a single-family income is your priority, Gilbert says.

"You need to have an open discussion with your peers and say, 'We really can't afford to go out to restaurants and do these other things because we've chosen to live this one-income lifestyle,'" he says.

But Don't Cut Back too Much

Don't fall into the trap of eliminating long-term savings, Gilbert says.

"Because the retirement savings isn't immediately tangible, it's very appealing for a lot of folks to cut back on it," he says.

The same goes for discretionary spending. Ever go on a super-strict diet and entirely deprive yourself of certain foods, only to take a hard fall off the wagon? That's what too much cutting can do, Lawrence says.

If dining out or coffee is a priority or a networking tool, it might be better to cut other things from the budget, she says.

Recast Your Savings Strategy

Just because you plan to live on one family income doesn't mean you have to give up that other paycheck.

Keeping two incomes but relying only on one for living expenses can open up a world of savings opportunities for things such as starting a business, planning for retirement or building a cash reserve in case of a layoff, experts say.

"A lot of people use one income for the necessities -- the actual mortgage, the transportation expenses, the food," Backon says. "Then, they use the other income for things they could at some point do without."

Give it a Trial Run

Practice what it's like to live on a single-family income for a while, especially if you don't have a sound budget to begin with, Gilbert says.

"The best way to do this is to pretend you don't have the money," he says.

Gilbert advises setting up an automatic transfer from the bank and withdrawing the entire second paycheck so you don't even see that money for a year. Then put the cash toward a secondary goal such as savings or a vacation.

"In this day of instant gratification and unbelievable media pressure to spend, this ability to save and to make lifestyle adjustments is more powerful than anyone really realizes," Lawrence says.